Metal In Oil Filter

If you got metal in your oil filter, that means that you have metal in your oil pump too, and it needs to be replaced. Worst case is that it jams, and you have no oil pressure, and the engine seize up.

Metal chips in the oil is never good. Time to get out the wrenches and start tearing it down.

The reality is that something got cycled through the engine, and by that I mean the WHOLE engine. Every nook, cranny and oil passage is contaminated with metal particles, and at some point, some of the metal got sucked into the oil pump pickup. The clearances are very tight in the oil pump and it stopped cold, while the oil pump drive shaft did not and it snapped. The entire motor is a goner. It needs to come out for a complete rebuild, thinking otherwise is living in denial.

Hard to tell from the picture, but looks like some type of washer. If that is trued, then it's reasonable to think there is a loose nut rolling around somewhere that once retained the washer. Like others have said, time to start a teardown to find some answers.

I would seriously look at the timing chain sprockets and also a valve spring retainers. Running and backfiring are not good sign at all. But one thing is for sure. You need to oper her up.

Good luck.

$1800 sounds like about 1/2 of what it should be. I'd be leery of any quote that low. What parts and machine work are they promising? The pic of your engine without the pan looked like a fair amount of buildup to me, indicating very rare oil changes, so I don't think I'd just go with rings and bearings on this one. While a decent mechanic can have an early Mustang engine out in a couple hours, there's also the couple hours to put it back in. Shops around here typically charge near $75 an hour and more, so if you subtract the approx $300 that comes to, that means your getting a long-block rebuild for $1500 and I really don't see how that's possible. I'd shop around.

Price may be pending on location as well. It seems like a good deal, but not too good to be true.

A guy could pull an engine in a weekend, with a few rented tools and a helper.
A new oil pump is in order with out a doubt, and some head work. But I'm not sure that the bits in the pan necessitate a rebuild.

Again, I think cam,lifters and probably a few bent push rods. Oil pump and oil pump drive shaft.

I'd check the bearings and run a brush thru the passages, put a better cam and lifters in it and call it good.
Or not.

I am not there, it isn't my car, or my check book. But I don't have any reason to screw a guy on the internet either......